New Ulm's water and wastewater utilities are facing a significant challenge: the need for extensive maintenance, overhauls, and replacements due to aging infrastructure. This has led to a proposed rate increase of $53 over 3.5 years, which has sparked debate and concern among residents. The utility director, Brett Fleck, explains that the study conducted by Dave Berg Consulting identified a need for more revenue, with a recommended increase of $2 million per year for the next five years. This is to ensure the city's utility rates are in line with the costs of maintaining infrastructure, especially for the water department's 13 wells, some of which are over 60 years old and require costly repairs or re-drilling.
Fleck argues that New Ulm's rates are not unusually high, citing the middle-of-the-road position when compared to other municipal utilities in the region. He attributes the city's good track record in maintaining utilities to luck, as the wells in need of work are located in a floodplain, allowing for maintenance during relatively dry springs. However, he emphasizes the necessity of investing in assets and servicing debt, which is part of the rate increase.
The proposed rate increase aims to balance protecting customers from rate shock with a single increase while preventing higher bills if multiple increases were stretched out. Fleck acknowledges the challenge of calculating rate increases for commercial and industrial properties, but notes that the overall utility bill increase could appear relatively small for some customers since the rate increase is only for water and wastewater.
The New Ulm Public Utilities Commission (NUPUC) will vote on the new rate schedule during its August meeting, with the rates set to go into effect in October. Fleck believes that the increase is necessary to ensure the city's utilities remain reliable and functional, and he hopes to maintain the city's good track record in maintaining utilities.
